MONTREAL, Feb. 13, 2019 /CNW Telbec/ - Yellow Pages Limited
(TSX: Y) (the "Company"), a leading Canadian digital media and
marketing company, released its operating and financial results
today for the quarter and year ended December 31, 2018.
"This quarter, for the fourth quarter in a row, we are reporting
significantly increased EBITDA less CAPEX, which is 25% higher than
last year. For the full year 2018, EBITDA less CAPEX is 48% higher
than the prior year. This reflects the continued alignment of our
spending to the reality of our revenues and the shedding of
unprofitable and non-synergistic business. And our
debt1, excluding lease obligations, net of cash at the
end of the quarter is $182 million,
which is less than 1x EBITDA, down by almost half since a year ago.
Meanwhile, we have been laying the groundwork necessary for
achieving real improvement in our revenue trends, including having
completed the process of restructuring collective bargaining
agreements covering virtually all of our sales professionals. The
new agreements provide us with important new ability to manage and
reward performance and with critical flexibility to respond to the
shifting needs of our competitive landscape." said
David A. Eckert, President and CEO of Yellow Pages
Limited.
Financial
Highlights
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(In thousands of
Canadian dollars, except percentage, and per share
information)
|
|
For the
three-month periods
ended December 31,
|
For the
years ended
December 31,
|
Yellow Pages
Limited
|
2018
|
2017
|
2018
|
2017
|
Revenues
|
$124,519
|
$178,548
|
$577,195
|
$727,967
|
Adjusted
EBITDA2
|
$41,149
|
$45,689
|
$192,565
|
$183,109
|
Adjusted
EBITDA2 margin
|
33.0%
|
25.6%
|
33.4%
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25.2%
|
Net earnings
(loss)
|
$39,957
|
$(584,602)
|
$82,809
|
$(594,482)
|
Basic earnings (loss)
per share
|
$1.51
|
$(22.26)
|
$3.13
|
$(22.52)
|
Diluted earnings
(loss) per share
|
$1.28
|
$(22.26)
|
$2.78
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$(22.52)
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CAPEX2
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$4,040
|
$15,891
|
$12,036
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$60,885
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Adjusted EBITDA less
CAPEX2
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$37,109
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$29,798
|
$180,529
|
$122,224
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Cash flow from
operating activities
|
$41,782
|
$24,009
|
$134,659
|
$116,577
|
Fourth Quarter 2018 Results
- Adjusted EBITDA less CAPEX2 increased by
$7.3 million, to $37.1 million, despite a $54.0 million revenue decline relative to the
fourth quarter of 2017.
- Net earnings increased to $40.0
million or $1.28 per diluted
share.
Segmented Information
The Company's operations are divided into the following four
segments:
- YP – digital and traditional marketing solutions, including
owned and operated media, provided to small and medium sized
enterprises ("SMEs"). This segment included the operations of
RedFlagDeals.com™, Canada's
leading provider of online and mobile promotions, deals, coupons
and shopping forums, until its sale on August 22, 2018.
- Agency – national advertising services to brands and
publishers. The Agency segment no longer has operations as a result
of the sale of Totem as of May 31,
2018, the sale of its JUICE assets for $1.0 million excluding working capital as of
December 31, 2018 and through the
liquidation of its Mediative division by January 31, 2019.
- Real Estate – media and expertise to help Canadians buy and
sell their homes. As a result of the sale of ComFree/DuProprio
(CFDP) as of July 6, 2018 and Yellow
Pages NextHome as of July 23, 2018,
the Company divested all of the operations of its Real Estate
segment.
- Other – 411.ca digital directory service and included local
lifestyles magazines specific to the Western Canadian market until
the divestiture of Western Media Group as of May 31, 2018.
An overview of each segment and the performance of each segment
for the three-month period and for the year ended December 31, 2018 can be found in the
February 13, 2019 Management's
Discussion and Analysis.
Financial Results for the Fourth Quarter of 2018
For the three-month period ended December
31, 2018, total revenues amounted to $124.5 million as compared to $178.5 million for the same period last year
representing a decrease of 30.3% year-over year or $54.0 million of which $16.2 million is attributable to divested
businesses. Other than the decrease resulting from the
divestitures, the decline in total revenues for the quarter ended
December 31, 2018 was due to digital
revenue decline in all segments and YP segment print revenue
decline.
Adjusted EBITDA decreased by $4.5
million to $41.1 million
during the fourth quarter ended December 31,
2018, compared to $45.7
million during the same period last year. Our Adjusted
EBITDA margin for the fourth quarter of 2018 was 33.0% compared to
25.6% for the same period last year. The decrease in Adjusted
EBITDA for the three-month period ended December 31, 2018 was
impacted by lower overall revenues and unfavourable changes in
product mix. However revenue pressures were mostly offset by an
increase in Adjusted EBITDA margin as a percentage of revenues due
to reductions in our cost structure including reductions in our
workforce and associated employee costs, reductions in our office
space footprint, and other spending reductions across the
Company.
Adjusted EBITDA less CAPEX increased by $7.3 million to $37.1
million for the three-month period ended December 31, 2018 compared to $29.8 million during the same period in 2017. The
increase in Adjusted EBITDA less CAPEX1 for the
three-month period ended December 31,
2018 was due to decreased spending on software development,
office and computer equipment and leasehold improvements associated
with office relocations partially offset by lower Adjusted
EBITDA.
The Company recorded net earnings of $40.0 million and a net loss of $584.6 million during the fourth quarters of 2018
and 2017, respectively. The improvement in net earnings,
notwithstanding the $507.0 million
impairment charge recorded in the fourth quarter of 2017, is mainly
due to decreased depreciation and amortization expenses,
restructuring and other charges and a recovery of income taxes.
Cash flows from operating activities increased by $17.8 million to $41.8
million for the three-month period ended December 31, 2018 compared to the same period in
2017. Cash flows benefited by an additional $30.2 million generated by the change in
operating assets and liabilities as well as $3.8 million lower funding of post-employment
benefit plans in excess of costs partially offset by $8.9 million higher interest paid, $4.5 million lower Adjusted EBITDA and
$4.2 million higher payments for
restructuring and other charges payments. The restructuring and
other charges relate to the workforce reductions, office closures,
and asset impairments taken in 2018 and the higher interest paid is
mainly due to the higher interest rate on the Senior Secured
Notes.
Financial Results for the Year Ended December 31, 2018
For the year ended December 31,
2018, total revenues amounted to $577.2 million as compared to $728.0 million for the same period last year
representing a decrease of 20.7% year-over year or $150.8 million of which $33.3 million is attributable to divested
businesses. Other than the decrease resulting from the
divestitures, the decline in total revenues for the year ended
December 31, 2018 was due to digital
revenue declines in all segments and YP segment print revenue
decline.
For the year ended December 31,
2018, Adjusted EBITDA increased by $9.5 million or 5.2% to $192.6 million compared to $183.1 million for the same period last year.
Adjusted EBITDA margin amounted to 33.4% for the year ended
December 31, 2018 compared to 25.2%
for the same period last year. The increase in Adjusted EBITDA and
Adjusted EBITDA margin for the year ended December 31, 2018 were mainly the result of
reductions in our cost structure including reductions in our
workforce and associated costs, reductions in the Company's office
space footprint, and other spending reductions across the
Company.
For the year ended December 31,
2018, Adjusted EBITDA less CAPEX increased by $58.3 million or 47.7% to $180.5 million compared to $122.2 million for the same period last year. The
increase in Adjusted EBITDA less CAPEX for the year ended
December 31, 2018 was mainly impacted
by the result of higher Adjusted EBITDA and decreased spending on
software development, office and computer equipment and leasehold
improvements associated with office relocations.
Net earnings increased to $82.8
million for the year ended December
31, 2018 from a net loss of $594.5
million for the same period last year. Notwithstanding the
impairment charge of $507.0 million recorded in 2017, the
improvement in net earnings is mainly due to higher Adjusted
EBITDA, decreased depreciation and amortization expenses and
restructuring and other charges, a gain on the sale of businesses
and the recovery of income taxes.
Cash flows from operating activities increased by $18.1 million to $134.7
million for the year ended December
31, 2018 compared to the same period in 2017. Cash flows
benefited by an additional $25.1
million generated by the change in operating assets and
liabilities as well as $9.5 million higher Adjusted EBITDA and
$7.0 million lower funding of
post-employment benefit plans in excess of costs partially offset
by $16.3 million higher payments for
restructuring and other charges payments and $5.3 million higher interest paid. The
restructuring and other charges relate to the workforce reductions,
office closures, and asset impairments taken in 2018 and the higher
interest paid is mainly due to the higher interest rate on the
senior notes.
Conference Call & Webcast
Yellow Pages Limited
will hold an analyst and media call and simultaneous webcast at
8:30 a.m. (Eastern Time) on
February 13, 2019 to discuss fourth
quarter 2018 results. The call may be accessed by dialing
416-340-2216 within the Toronto
area, or 1-800-273-9672 outside of Toronto. Please be prepared to join the
conference at least 5 minutes prior to the start time.
The call will be simultaneously webcast on the Company's website
at:
https://corporate.yp.ca/en/investors/financial-reports.
The conference call will be archived in the Investors section of
the site at:
https://corporate.yp.ca/en/investors/financial-events-presentations/.
About Yellow Pages Limited
Yellow Pages Limited (TSX:
Y) is a Canadian digital media and marketing company that creates
opportunities for buyers and sellers to interact and transact in
the local economy. Yellow Pages holds some of Canada's leading local online properties
including YP.ca, Canada411.ca, 411.ca and Bookenda.com. The Company
also holds the YP, YP Shopwise, YP Dine, Canada411, 411,
Bookenda, and mobile applications and Yellow Pages print
directories. For more information visit
www.corporate.yp.ca.
Caution Concerning Forward-Looking Statements
This
press release contains forward-looking statements about the
objectives, strategies, financial conditions, results of operations
and businesses of the Company. These statements are forward-looking
as they are based on our current expectations, as at February 13, 2019, about our business and the
markets we operate in, and on various estimates and assumptions.
Our actual results could materially differ from our expectations if
known or unknown risks affect our business, or if our estimates or
assumptions turn out to be inaccurate. As a result, there is no
assurance that any forward-looking statements will materialize.
Risks that could cause our results to differ materially from our
current expectations are discussed in section 5 of our
February 13, 2019 Management's Discussion and Analysis.
We disclaim any intention or obligation to update any
forward-looking statements, except as required by law, even if new
information becomes available, as a result of future events or for
any other reason.
1
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Debt Debt
is comprised of Senior Secured Notes, Exchangeable debentures and
Lease obligations. Refer to page 27 of the February 13, 2019
MD&A.
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2
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Non-IFRS
Measures In order to provide a better understanding of the
results, the Company uses the terms Adjusted EBITDA and Adjusted
EBITDA margin. Adjusted EBITDA is defined as income from operations
before depreciation and amortization, impairment of intangible
assets and goodwill, and restructuring and other charges, or
revenues less operating costs, as shown in Yellow Pages Limited's
consolidated statements of income (loss). Adjusted EBITDA margin is
defined as the percentage of Adjusted EBITDA to revenues. Adjusted
EBITDA and Adjusted EBITDA margin are not performance measures
defined under IFRS and are not considered an alternative to income
from operations or net earnings in the context of measuring Yellow
Pages performance. Adjusted EBITDA and Adjusted EBITDA margin do
not have a standardized meaning and are therefore not likely to be
comparable to similar measures used by other publicly traded
companies. Management uses Adjusted EBITDA and Adjusted EBITDA
margin to evaluate the performance of its business as it reflects
its ongoing profitability. Management believes that certain
investors and analysts use Adjusted EBITDA and Adjusted EBITDA
margin to measure a company's ability to service debt and to meet
other payment obligations or to value companies in the media and
marketing solutions industry as well as to evaluate the performance
of a business.
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The Company also uses
Adjusted EBITDA less CAPEX, which is defined as Adjusted EBITDA, or
revenues less operating costs, as shown in Yellow Pages Limited's
consolidated statements of income (loss), less CAPEX which we
define as additions to intangible assets and additions to property
and equipment less lease incentives received all as reported
in the Investing Activities section of the Company's condensed
consolidated statements of cash flows. Adjusted EBITDA less CAPEX
is a non-IFRS financial measure and does not have any standardized
meaning under IFRS. Therefore, it is unlikely to be comparable to
similar measures presented by other publicly traded companies. We
use Adjusted EBITDA less CAPEX to evaluate the performance of our
business as it reflects its ongoing profitability. We believe that
certain investors and analysts use Adjusted EBITDA less CAPEX to
evaluate the performance of a business. Refer to the February 13,
2019 MD&A for a reconciliation of CAPEX.
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SOURCE Yellow Pages Limited